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California Paid Family Leave: A Good-News Story

Good news came from California this week that has major implications for America’s working families. A new report about California’s Paid Family Leave – implemented in 2004, the first of just two programs in the country that makes it possible for workers to take paid time off to care for their families at crucial moments – shows the program’s a success.

The report, by researchers at UCLA/CUNY and the Center for Economic and Policy Research, finds that the family leave program has provided much-needed relief for more than 1 million Californians in just six years without costing the government or employers a dime. If any doubts remained about Paid Family Leave in California – or its potential in other states – this study puts them to rest.

Under California’s program, workers may take up to six weeks off at 55 percent of their usual pay, up to $987 a week, and the benefits are covered by small employee contributions to the state’s disability insurance fund. Being able to take time off to bond with a new child or seriously ill spouse or parent, with modest pay, is still a basic workplace practice that’s unavailable to most Americans – yet commonplace in the rest of the industrialized world.

In hundreds of interviews across California, employers in the new “Leaves That Pay” report gave the state program high marks, defying the early critics who insisted it would be a “job killer.” Nine in ten employers reported that it had had a positive effect or “no noticeable effect” on productivity and performance. Very few reported any abuses. And many employers actually saved money when workers entitled to employer-provided leave were able to take family leave instead.

Low-wage workers, many of whom are in jobs without paid sick leave or vacation time, have benefited hugely from the program. So have their new children, their spouses, and especially those in need of care from their families. New fathers have been able to bond with their infants, given time that would otherwise be lost forever, and new mothers using the California program have had more time to breastfeed.

No wonder other states are interested in paid family leave. So far, only New Jersey has enacted a law modeled on California’s. (Washington State passed a paid parental-leave law in 2007 but has yet to provide start-up funding.) But many more are voicing interest – with proposals being considered in Arizona, Illinois, Maine, Massachusetts, Missouri, New Hampshire, New York, Oregon and Pennsylvania.

For states that already have employee-financed temporary disability funds, as California and New Jersey did, expanding the program is administratively straightforward. For those that need more start-up work, the good news is that the federal government is supportive: President Obama’s proposed budget for the 2011 fiscal year included funding for states to implement paid family leave. The budget impasse forestalled funds this year, but the move offers a strong signal that the federal government is interested in encouraging state action.

While California’s experience makes a strong case for other states, it also shows areas where states can do better. If there’s one problem with the California program, the researchers found, it’s that it’s underused. Among the workers surveyed who had had a new baby or seriously ill family member, 51.4 percent were not aware of the family leave law. Of those who did know about the program but did not apply for it, 31.2 percent said they could not afford to take leave with the reduction in pay.

Perhaps not surprisingly, the workers who need the program the most — low-income workers, immigrants and those with few employer-paid benefits — are least likely to know about it. They also tend to be less secure in their jobs and, even when they know they are eligible, more likely to forgo leaves for fear of angering their employers.

States considering new programs, then, should incorporate security protections that ensure that those needed at home will have a job to return to, and they should promote awareness of the law throughout the work force. Any new proposal should make all workers eligible for the program – many public employees in California are left out – and it should come with a rate of wage replacement that makes it a truly viable option.

In outreach to both workers and employers, states should call on advocates with wide experience in workplace issues to help in the process. If California and New Jersey can make paid family leave a reality, so can the rest of the country.